Luvata Forecasts Demand Will Climb 5% in China, U.S. in 2013

Luvata, the maker of copper components in everything from solar panels to zippers, expects demand for its products will climb at least 5 percent this year in the U.S. and China, the world’s biggest users.

Gains in residential and commercial construction in the U.S. are boosting demand, John Peter Leesi, chief executive officer, said in an interview March 1. Luvata expects “flat-to-small growth” in demand in Europe in 2013, he said.

“We see the market recovering and we remain hopeful and optimistic on the U.S.,” Leesi said at the company’s headquarters in Brentford, England. “Two sectors are very important to us: residential and commercial construction. We have now seen recovery in those sectors and that translates into business and orders for us.”

The U.S. housing industry is “structurally improving” and will become an important driver for copper demand and sentiment, while Chinese imports of refined metal will pick up in the next three to six months, Goldman Sachs Group Inc. said in a March 1 report. The Copper Development Association says construction generates about 40 percent of demand.

Global copper demand will climb 3.7 percent in 2013 after the smallest increase in three years in 2012, Credit Suisse Group AG estimated in a Jan. 3 report. Demand in North America will expand 2 percent in 2013 and usage in China will grow 6 percent, according to the bank. China accounts for 41 percent of global consumption and North America 9.9 percent, it said.


Air-conditioning shipments in China, Luvata’s second-biggest market after the U.S., will probably expand this year after a “poor” 2012, Leesi said. The country’s air-conditioner output fell for the first time in three years in 2012, according to industrial production data.

“We believe there is a potential for this number to improve,” Leesi said. “We are rather positive about Asia, where China is an important market.”

Urbanization in India makes it “important” for the copper market, while the change there will be slower than China’s, Leesi said. India accounts for about 3 percent of global copper demand, according to Credit Suisse. The company sees “significant double-digit growth” in technical precision air cooling for data centers, including those in Bangalore, Leesi said.

Copper for delivery in three months rose 0.3 percent to $7,722.25 a metric ton by 3:57 p.m. on the London Metal Exchange. The metal fell 2.6 percent this year.

(Updates copper price in last paragraph.)
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